De Beers in marketing blitz

SHARE | Monday, 26 February 2018 | By Kabelo Adamson

De Beers has announced that it spent $140 million (approximately P1.4 billion) in marketing activities in 2017 through a combination of proprietary and partnership activity centred on the US, China and India. The Executive Vice President of De Beers Group of Companies, Paul Rowley, told a Media Roundtable in Gaborone that this was an increase of 19 percent from the previous year. He said De Beers also increased its investment in the Diamond Producers Association, a producer-wide body that works to enhance consumer demand by promoting the appeal, integrity and reputation of diamonds. Rowley said the group also introduced a new development of a new digital platform for the diamond industry, backed by highly secure block-chain technology, which will provide immutable record for every diamond that is registered. This initiative is currently in the pilot phase and is designed to underpin confidence in diamonds and the industry for all stakeholders while streamlining existing manual processes and creating new efficiencies in the value chain. Speaking on the markets, Rowley said the US remains the largest consumer of polished diamonds, accounting for 50 percent of the whole consumption followed by China and India while the rest is spread across the world. He said signs are that global consumer demand for diamond jewellery registered positive growth in 2017 in US Dollar terms following marginal increase in 2016. Growth in the US is said to have once again been the main contributor to this positive outcome. Demand for diamond jewellery by Chinese consumers is also reported to have grown marginally, in locally currency and Dollar terms.

In contrast, consumer demand for diamonds is said to have softened in India and the Gulf states, both local currency and dollar terms while Japan’s consumer demand growth was flat in local currency and lower in dollars. In 2017, De Beers total revenue declined by four percent to $5.8 billion, from $6.1 billion which is said to have been expected given the strong midstream restocking in the first half of 2016. During the period under review, rough diamond production increased by 22 percent to 33.5 million carats from 27.3 million carats which Rowley said reflects stronger underlying trading conditions as well as the contribution from the ramp-up of Gacho Kue, the Canadian diamond mine. Debswana, which is the main contributor to De Beers in terms of production, increased production by 11 percent to 22.7 million carats from 20.5 million carats in 2016. Production at Orapa was 28 percent higher, mainly driven by planned increases in plant performance and the ramp-up of Plant 1, which was previously on partial care and maintenance in response to trading conditions in late 2015. Jwaneng processed its first ore form Cut-8, which is expected to become the mine’s main source of ore during 2018.